Canada’s college applied research sector: A secret economic weapon in uncertain times

As we pursue new made-in-Canada solutions to navigate multiple seismic shifts in our economy, the industry-partnered applied research being carried out at Canadian colleges, Collège d’enseignement général et professionnel (CEGEPs) and polytechnics can serve as a key secret weapon and represents one of the most important investments we can make in the productivity of Canadian businesses.

Canada is going through interesting challenges these days. We have a somewhat unpredictable neighbour to the South, a promise to dramatically increase spending on our military, cries at home of a housing crisis, a complete reversal on the immigration front… This comes along with more perennial headaches like climate change, the ever-increasing cost of healthcare, and the Toronto Maple Leafs still not winning the Stanley Cup. Add to that the usual budget deficits, and you’ve got a federal government with its hands full.

In the face of said budget deficits, our federal ministries have been directed to find 15 percent in efficiencies, savings or money in the sofa in each of their portfolios. The request was made in early July, with answers to be found by late August, in time to be rolled up into the Fall federal budget to be delivered on 4 November 2025. Given that there are many incompressible parts of a federal budget such as debt charges and transfers to individuals and provinces, this leaves program spending vulnerable. Of the whole gamut, the one on which I want to focus here is research funding. College applied research funding, in particular.

(Note to the reader: I am writing this in late September 2025 and it will be published post-budget, in late November 2025. I realize that I’m in a strange superposition of two states while advocating for needed budget inclusions: will they be in there or not? A Schrödinger’s cat, of sorts, which will either be dead or alive by the time you read this. The basic argument made here, though, will be valid in 2026, 2027, 2028, and so on.)

Canada’s best-kept secret

Ask any Canadian researcher on the street and you may get an answer like “I do it myself, on the web, to learn about vaccines!” If you enter into a conversation with this person to enlighten them, bless your heart, it will be a difficult and long one. If you’re luckier, you’ll likely get responses like “universities”, “government labs”, and “industry.” Those are great and true answers, if slightly incomplete. Colleges, CEGEPs and polytechnics also conduct research. Most of it is done with industry or community partners, the vast majority being small and medium enterprises, and applied directly to developing new products, processes and services for these companies to commercialize or adopt in their production or delivery of services.

These are generally short projects, with about 80 percent completed in under one year. Usually, the intellectual property developed as outcomes of these applied research projects remains with the partners, thereby shortening the road to commercialization and benefits to the Canadian economy.

According to a 2024 survey by Colleges and Institutes Canada, colleges conducted nearly 8,500 applied research projects across Canada in 2023-24, resulting in close to 9,000 new products, prototypes, processes and services in sectors as varied as advanced manufacturing, climate-smart agriculture, food production and housing construction. At Niagara College alone, we conduct between 200 and 300 projects every year, all featuring industry partners, our staff and faculty experts, and more than 2,000 students. Our outcomes have been commercialized by companies in the food and beverage, horticulture, manufacturing, and retail and service sectors. 99.7 percent of college research partnerships take place in Canada, driving economic development and job creation through made-in-Canada and for-Canada solutions. This is accomplished despite colleges and polytechnics receiving just 2.9 percent of federal research funding.

A shot in the arm…

The Natural Sciences and Engineering Research Council (NSERC) College and Community Innovation (CCI) Program, which constitutes the principal part of college applied research funding, started as a 600,000 dollar pilot with six colleges in 2004-2007 including Niagara College. It was made permanent in 2008. This program now supports research at over 120 eligible institutions across Canada to the tune of more than 100 million dollars each year to accelerate innovation and provide R and D support in their communities.

In Budget 2023, the federal government invested 108.6 million dollars in the program to further leverage the potential of college applied research to help businesses grow and build a stronger and more innovative Canadian economy. The roll-out was to take place over three years. This allowed NSERC to recast its offerings in a more optimal way and to provide a welcome boost to a system that could still take on more work. The problem now is that this three-year investment is coming to an end at the same time that the federal government will be looking for program cuts.

…that requires a booster!

Prime Minister Mark Carney promised in the last federal election campaign that a government led by him will “spend less, so Canada can invest more.” Former Transport and Internal Trade Minister Chrystia Freeland said in an interview with CBC’s Power and Politics that federal funds will be redirected to “significant investments in the productive capacity of the Canadian economy.”

A great way to invest in the productivity of Canadian companies is through college applied research. We must at the very least make the current levels of funding permanent but ideally increase them to a point where the full potential of colleges working with industry is realized. In just 17 years, the Canadian college system has grown its government-funded research outcomes from nearly zero to the current numbers. There is clear potential to generate even more impact for the Canadian economy.

Colleges, CEGEPs and polytechnic institutes give Canada a unique advantage over jurisdictions that do not encourage similar institutions to engage in research. At a time when Canadian companies are facing tariff headwinds, hoping to leverage increased military spending, and looking for innovations to build more homes and care for an aging population, investing in college applied research seems wise. Who knows, we might even be able to do something about the Leafs…

References

1. CBC article, 7 July 2025:
   https://www.cbc.ca/news/politics/ottawa-spending-cuts-1.7579022
   
2. Government of Canada, 17 September 2025:
   https://www.canada.ca/…/budget-2025-on-november-4-2025.html
   
3. Higher Education Strategies Associates, 8 September 2025:
   https://higheredstrategy.com/the-coming-federal-cuts-part-1/
   
4. Training for a Strong and Secure Canada: Pre-Budget Submission to the House of Commons Standing Committee on Finance, August 2025:
   SharePoint PDF Link
   
5. Government of Canada, Standing Committee on Science and Research, The Distribution of Federal Government Funding Among Canada’s Post-Secondary Institutions, 5 December 2024:
   https://www.ourcommons.ca/…/13476974
   
6. Tech Access Canada, Canadian College Applied Research: A Guide for Industry:
   https://tech-access.ca/…/canadian-college-applied-research-a-guide-for-industry/
   
7. Colleges & Institutes Canada, Harnessing Applied Research to Meet Canada’s Challenges, Submitted to the Standing Committee on Science and Research, May 2025:
   PDF Link
   
8. Government of Canada, Budget 2023: A Made-in-Canada Plan, p.111.
9. CTV News, 7 July 2025:
   https://www.ctvnews.ca/…/operational-savings-by-end-of-summer/
   
10. CBC article, 7 July 2025:
    https://www.cbc.ca/news/politics/ottawa-spending-cuts-1.7579022